[Federal Register Volume 82, Number 216 (Thursday, November 9, 2017)]
[Rules and Regulations]
[Pages 51986-51998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24349]
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DEPARTMENT OF LABOR
Occupational Safety and Health Administration
29 CFR Part 1926
[Docket ID-OSHA-2007-0066]
RIN 1218-AC96
Cranes and Derricks in Construction: Operator Certification
Extension
AGENCY: Occupational Safety and Health Administration (OSHA), Labor.
ACTION: Final rule.
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SUMMARY: OSHA is delaying its deadline for employers to ensure that
crane operators are certified by one year until November 10, 2018. OSHA
is also extending its employer duty to ensure that crane operators are
competent to operate a crane safely for the same one-year period.
DATES: This final rule is effective on November 9, 2017.
ADDRESSES: In accordance with 28 U.S.C. 2112(a)(2), the Agency
designates Ann Rosenthal, Associate Solicitor of Labor for Occupational
Safety and Health, Office of the Solicitor, Room S-4004, U.S.
Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210,
to receive petitions for review of the final rule.
FOR FURTHER INFORMATION CONTACT:
General information and press inquiries: Mr. Frank Meilinger, OSHA
Office of Communications: telephone: (202) 693-1999; email:
meilinger.francis2@dol.gov.
Technical inquiries: Mr. Vernon Preston, Directorate of
Construction: telephone: (202) 693-2020; fax: (202) 693-1689; email:
Preston.Vernon@dol.gov.
Copies of this Federal Register document and news releases:
Electronic copies of these documents are available at OSHA's Web page
at http://www.osha.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Introduction
OSHA is publishing this final rule to further extend by one year
the employer duty to ensure the competency of crane operators involved
in construction work. Previously this duty was scheduled to terminate
on November 10, 2017, but now continues until November 10, 2018. OSHA
also is further delaying the deadline for crane operator certification
for one year from November 10, 2017, to November 10, 2018. As explained
in more detail in the following Regulatory Background section, the
extension and delay are necessary to provide sufficient time for OSHA
to complete a related rulemaking to address issues with its existing
Cranes and Derricks in Construction standard (29 CFR part 1926, subpart
CC, referred to as "the crane standard" hereafter) (75 FR 47905).
In establishing the effective date of this action, the Agency finds
good cause pursuant to 5 U.S.C. 553(d)(3) of the Administrative
Procedure Act that this rule be made effective on November 9, 2017,
rather than delaying the effective date for 30 days after publication.
The basis for this finding is that it is unnecessary to delay this
effective date to provide an additional period of time for employers to
comply with a new requirement because OSHA is extending the status quo.
This final rule establishes no new burdens on the regulated community;
rather, it further delays implementation of the crane operator
certification requirements in the crane standard and further extends
the employer duty in the crane standard to ensure the competency of
crane operators, a duty that employers have been required to comply
with since publication of the crane standard in 2010.
OSHA also concludes that delaying the effective date of this
extension rulemaking beyond November 9, 2017, would be contrary to the
public interest and would significantly disrupt the construction
industry. If the extension does not go into effect on November 9, 2017,
the crane operator certification requirements in the 2010 crane
standard would go into effect and the employer duty in the crane
standard to ensure crane operator competency would end. As the Agency
notes below in Section II.A (Extension of operator certification
deadline), there is evidence in the record that many crane operators in
the construction industry do not have the certification required by the
crane standard and would be out of compliance with the standard. This
would not be offset through the employer duty to ensure crane operator
competency because that duty would no longer exist. Therefore, OSHA
concludes that it is in the public interest to avoid such disruption by
having this extension go into effect by November 9, 2017. Finally, OSHA
notes that by delaying the operator certification deadline, OSHA is
temporarily relieving the regulated community of a compliance duty,
which under 5 U.S.C. 553(d)(1) is a separate basis for allowing a rule
to become effective in less than 30 days.
By delaying the deadline for employers to ensure that crane
operators are certified until November 10, 2018, and by extending the
employer duty to ensure that crane operators are competent until that
same date, this rule will avoid disrupting the construction industry
and allow OSHA time to complete a related crane standard rulemaking
that will address these and other issues.
In this preamble, OSHA cites to documents in Docket No. OSHA-2007-
0066, the docket for this rulemaking. To simplify these document cites,
they start with "ID" followed by the last four digits of their full
docket identification number. For example, if a document's full docket
identification number is ID-OSHA-2007-0066-1234, the cite used in this
preamble would be ID-1234. The docket is available at http://www.regulations.gov, the Federal eRulemaking Portal.
B. Summary of Economic Impact
This final rule is not economically significant. OSHA is revising
29 CFR 1926.1427(k) (competency assessment and training) to delay the
deadline for compliance with the operator-certification requirement in
the crane standard for one year, and to extend the existing employer
duty to ensure crane operator competency for the same period. OSHA's
final economic analysis shows that delaying the date for operator
certification and extending the employer's assessment of crane operator
competency, rather than following the current crane standard, will
result in a net cost savings for the affected industries. Delaying the
compliance date for operator certification results in estimated cost
savings that exceed the estimated new costs for employers to continue
to assess crane operators to ensure their competent operation of the
equipment in accordance with Sec. 1926.1427(k). The detailed final
economic analysis is in the "Agency Determinations" section of this
preamble.
C. Regulatory Background
1. Operator Certification Options
On August 9, 2010, OSHA published the final crane standard. OSHA
developed the standard through a negotiated rulemaking process. The
Agency established a Federal advisory committee, the Cranes and
Derricks Negotiated Rulemaking Advisory Committee (C-DAC), to develop a
draft proposed rule. C-DAC met in 2003 and 2004 and developed a draft
proposed rule (which included the provisions concerning crane operator
certification at issue in this rulemaking) that it provided to OSHA.
The Agency initiated a Small Business Advocacy Review Panel in 2006
and published the proposed rule for cranes in construction on October
9, 2008 (73 FR 59713). It closely followed C-DAC's draft proposal (73
FR 59718). OSHA received public comment on the proposal, and conducted
a public hearing. Among many other provisions, OSHA's 2010 final rule
incorporated, with minor changes, the four-option certification scheme
that C-DAC had recommended and the Agency had proposed. Accordingly, in
Sec. 1926.1427, OSHA requires employers to ensure that their crane
operators complete at least one of the following:
Option 1. Certification by an independent testing organization
accredited by a nationally recognized accrediting organization;
Option 2. Qualification by an employer's independently audited
program;
Option 3. Qualification by the U.S. military; or
Option 4. Compliance with qualifying State or local licensing
requirements (mandatory when applicable).
The third-party certification option in Sec. 1926.1427(b)--Option
1--is the only certification option that is "portable," meaning any
employer who employs an operator may rely on that operator's
certification as evidence of compliance with the crane standard's
operator certification requirement. This certification option also is
the only one available to all employers; it is the option OSHA, and the
parties that participated in the rulemaking, believed would be the one
most widely used. In this regard, OSHA is not aware of an audited
employer qualification program among construction industry employers
(Option 2), and the crane standard limits the U.S. military crane
operator certification programs (Option 3) to Federal employees of the
Department of Defense or the armed services. While State and local
governments certify some crane operators (Option 4), the vast majority
of operators who become certified do so through Option 1--by third-
party testing organizations accredited by a nationally recognized
accrediting organization.
Under Option 1, an independent testing organization tests crane
operators to determine if they warrant certification. Before a testing
organization can issue operator certifications, Sec. 1926.1427(b)(1)
of the crane standard provides that a nationally recognized accrediting
organization must accredit the testing organizations. To accredit a
testing organization, the accrediting agency must determine that the
testing organization meets industry-recognized criteria for written
testing materials, practical examinations, test administration,
grading, facilities and equipment, and personnel. The testing
organization must administer written and practical tests that:
Assess the operator's knowledge and skills regarding
subjects specified in the crane standard;
provide different levels of certification based on
equipment capacity and type;
have procedures to retest applicants who fail; and
have testing procedures for recertification.
Section 1926.1427(b)(2) of the crane standard also specifies that,
for the purposes of compliance with the crane standard, an operator is
deemed qualified to operate a particular piece of equipment only if the
operator is certified for that type and capacity of equipment or for
higher-capacity equipment of that type. It further provides that, if no
testing organization offers certification examinations for a particular
equipment type and/or capacity, the operator is deemed qualified to
operate that equipment if the operator is certified for the type/
capacity of equipment that is most similar to that equipment, and for
which a certification examination is available.
2. Overview of Sec. 1926.1427(k) (Phase-In Provision)
The crane standard published in 2010 replaced provisions in 29 CFR
part 1926, subpart N--Cranes, Derricks, Hoists, Elevators, and
Conveyors, of the construction safety standards. OSHA delayed the
deadline for the operator certification requirement for four years,
until November 10, 2014 (see Sec. 1926.1427(k)(1)). During this four-
year "phase-in" period, the crane standard imposed an employer duty
to ensure that crane operators could safely operate equipment (see
Sec. 1926.1727(k), Phase-in). Thus, pursuant to Sec.
1926.1427(k)(2)(i), OSHA required employers to "ensure that operators
of equipment covered by this standard are competent to operate the
equipment safely." Under Sec. 1926.1427(k)(2)(ii), employers must
train and evaluate the operator when the operator "assigned to operate
machinery does not have the required knowledge or ability to operate
the equipment safely."
3. Post-Final Rule Developments
After OSHA issued the crane standard, it continued to receive
feedback from members of the regulated community and conducted
stakeholder meetings on April 2 and 3, 2013, to give interested members
of the public the opportunity to express their views. Participants
included construction contractors, labor unions, crane manufacturers,
crane rental companies, accredited testing organizations, one of the
accrediting bodies, insurance companies, crane operator trainers, and
military employers. Detailed notes of participants' comments are
available at ID-0539. Various parties informed OSHA that, in their
opinion, the operator certification option would not adequately ensure
that crane operators could operate their equipment safely at a
construction site. They said that a certified operator would need
additional training, experience, and evaluation, beyond the training
and evaluation required to obtain certification, to ensure that he or
she could operate a crane safely.
OSHA also received information that two (of a total of four)
accredited testing organizations have been issuing certifications only
by "type" of crane, rather than offering different certifications by
"type and capacity" of crane, as the crane standard requires. The two
organizations later confirmed this (ID-0521, p. 109 and 246). As a
result, those certifications do not meet the standard's requirements
and operators who obtained certifications only from those organizations
could not, under OSHA's crane standard, operate cranes on construction
sites after November 10, 2014. Some stakeholders in the crane industry
requested that OSHA remove the capacity requirement.
Most of the participants in the stakeholder meetings expressed the
opinion that an operator's certification by an accredited testing
organization did not mean that the operator was fully competent or
experienced to operate a crane safely on a construction work site. The
participants likened operator certification to a new driver's license,
or a learner's permit, to drive a car. Most participants said that the
operator's employer should retain the responsibility to ensure that the
operator was qualified for the particular crane work assigned. Some
participants wanted certification to be, or viewed to be, sufficient to
operate a crane safely. Stakeholders noted that operator certification
was beneficial in establishing a minimum threshold of operator
knowledge and familiarity with cranes.
D. Initial Extension of the Employer Assessment Duties and Deadline for
Operator Certification
On February 10, 2014, OSHA published a proposal to delay the
deadline for operator certification by three additional years to
November 10, 2017, and to extend the existing employer duty to ensure
crane operator competency for the same period (79 FR 7611). OSHA
conducted a public hearing on May 19, 2014. Representatives of the
construction industry reiterated that requiring the certification of
all operators and supplanting the employer duty would not ensure the
competency of crane operators to safely operate cranes to do
construction work. A representative of one of the testing organizations
that certifies by capacity (and who had previously opposed removing the
capacity requirement) conceded that OSHA should undergo a rulemaking to
consider removing capacity from certification requirements.
On September 26, 2014, OSHA published a final rule that delayed the
operator certification deadline and extended the existing employer duty
for three years to November 10, 2017, to provide time for OSHA to
consider what regulatory approach it should take (79 FR 57785).
E. Consulting ACCSH--Draft Proposal for Revised Crane Operator
Requirements
With the additional three-year extension in place, OSHA began work
on a rulemaking to address the issues raised by stakeholders. On March
31 and April 1, 2015, the Agency consulted with the Advisory Committee
on Construction Safety and Health (ACCSH) to solicit feedback from
industry stakeholders on the draft regulatory text for a revised
operator certification standard.\1\ Prior to the meeting, OSHA made
available the draft regulatory text,\2\ an overview of the draft
regulatory text,\3\ and a summary of the site visits with
stakeholders.\4\ OSHA received many comments and suggestions for
revising the regulatory text at the ACCSH meeting. Since that meeting,
the Agency has worked to re-draft the regulatory text and preamble for
the proposed rule. To ensure the Agency has enough time to propose and
finalize the rulemaking, OSHA proposed this one-year extension of the
certification requirement compliance date (82 FR 41184 (Aug. 30,
2017)). As with the previous extensions, OSHA also proposed an
extension of the existing employer assessment duty for the same time
period (Id.). OSHA requested public comment on these proposals.
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\1\ Transcript for March 31: https://www.osha.gov/doc/accsh/transcripts/accsh_20150331.pdf; transcript for April 1: https://www.osha.gov/doc/accsh/transcripts/accsh_20150401.pdf.
\2\ https://www.osha.gov/doc/accsh/accshcrane.pdf.
\3\ https://www.osha.gov/doc/accsh/proposed_crane.html.
\4\ https://www.osha.gov/doc/accsh/summary_crane.html.
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II. Summary and Explanation of the Final Rule
Commenters in their written remarks on the proposal to delay the
operator certification deadline and extend the existing employer duty
to November 10, 2018 focused on three issues arising from the Agency's
proposed changes: (1) Whether to delay the date for crane operators to
be certified; (2) whether to extend the employer duty to ensure crane
operators are competent and safe; and (3) the length of time of an
extension. This section examines these issues--in the order above--by
first summarizing the comments and then explaining the Agency's
decisions and determinations based on the record as a whole.
A. Extension of Operator Certification Deadline
The majority of commenters supported the Agency's proposed
extension of the deadline for crane operators to be certified (ID-0545,
0561, 0563, 0566, 0572-575, 0578-582, 0584-585, 0588-597, 0599-614,
0617-618, 0621, 0624-627, 0632-640, 0642-643, 0645-647, 0651, 0653,
0656-660, 0662-664, 0666-667). Most agreed that an extension was
necessary to give OSHA time to address the issues regarding crane
operation raised after publication of the crane standard: Whether to
remove capacity from the crane standard's certification requirements
and the preservation of the employer's role in assessing operators for
safe crane operation (ID-0561, 0563, 0578, 0597, 0604, 0618, 0632,
0636, 0640, 0646-647, 0650-651, 0656, 0658, 0667). The National
Commission for the Certification of Crane Operators (NCCCO) supports
this rule "only in response to OSHA's stated need to address these two
issues." (ID-0632). In support of the extension, The International
Union of Operating Engineers (IUOE) stated that they along with
"contractors, insurers, trade associations, and third-party
certification bodies agree on the problems OSHA has identified . . .
that OSHA's `deemed qualified' language eliminates the employer's duty
. . ." and "that certification by `capacity' should be eliminated
from the regulatory requirements." (ID-0651). They conclude that
"[t]here is widespread agreement in the industry regarding the
necessity to postpone implementation of these two elements of the rule
in order to correct them." (Id.).
Some commenters asked OSHA to delay the compliance date of the
certification requirements in order to alleviate confusion that exists
in the industry regarding the crane operator certification
requirements. (ID-0604, 0606, 0642, 0647, 0650-651). In support of the
extension, the IUOE asked OSHA to "move quickly to eliminate the cloud
of uncertainty that has hung over this key safety measure for over a
decade." (ID-0651). Edison Electrical Institute hopes that "OSHA
works to clarify and formulate the necessary requirements for operator
certification and qualification under the final rule" as "[t]here are
still many questions that require answers on the certification process
and granting this extension will enable OSHA to continue its work with
impacted parties to ensure compliance is met and clarity is achieved."
(ID-0642). Imperial Crane Services, Inc., and the Chicago Crane Owners
Association support the extension "so that crane operator's
proficiency/qualification can be further clarified in the existing
cranes and derrick standard." (ID-0604).
Commenters were also very concerned that without an extension of
the operator certification requirements and the employer's duty, there
would be significant disruption to the construction industry. (ID-0561,
0580, 0605, 0611, 0618, 0626-627, 0636, 0640, 0643, 0646, 0650). In the
2014 extension, OSHA noted that the record indicated that roughly two-
thirds of certified operators were certified by one of the
organizations that does not offer certification by capacity. Thus, some
of the commenters observed that with a majority of certified operators
possessing a certification by crane type only, many employers of crane
operators would be in violation of operating a crane under OSHA
requirements and barred from operating a crane without the possibility
of being cited by OSHA. The Texas Crane Owners Association asserts that
without an extension, "the obligations under [the crane standard] will
undoubtedly disrupt the construction industry by creating a large
number of crane operators without compliant certification." (ID-0646).
The Associated General Contractors of America agrees that failure to
delay the compliance date "could potentially result in significant
disruptions in the construction industry with the number of crane
operators in possession of certifications that would be deemed
noncompliant if the November 10, 2017, effective date remains in
place." (ID-0640). Similarly, The Associated Builders and Contractors,
Inc., (ABC) commented that "many in the construction industry believe
that without an extension the industry will face a future crane
operator shortage. For the industry to continue to perform work without
disruption, it is important an extension is granted." (ID-0650).
"[W]ithout the proposed extension there will be a significant
disruption to the industry come November 10, 2017," commented North
America's Building Trades Unions, continuing that "many operators will
no longer be able to operate certain cranes because their current
certifications are not by crane capacity as currently called for in the
rule." (ID-0618).
Commenters opposed to the extension of the certification deadline
expressed concern that it would lead to unsafe worksites. (ID-0557,
0562/0665 (duplicate comments), 0571, 0577, 0620, 0629, 0644, 0649,
0652). Jack Pitt of Murray State University commented that if OSHA
delayed the compliance date, "then safety would not be a priority,"
continuing that it was his opinion that requiring certification
immediately "would eliminate quite a number of fatalities and
injuries. . . ." (ID-0665 and 0562). Chas Scott of Murray State
University commented that "[t]he longer the rule is delayed, the more
fatalities that are likely to occur." (ID-0557).\5\
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\5\ This commenter misinterpreted OSHA's previous benefits
estimate, which stated that the cranes standard would prevent 22
fatalities per year, as meaning that the enforcement of the operator
certification requirement would alone prevent that number of
fatalities. But as OSHA noted in the 2014 extension in response to
similar assertions, in calculating the benefits from fatalities
prevented "OSHA did not identify individual components of the
standard, but rather calculated the benefits of the entire cranes
standard as a whole. OSHA did not separately itemize benefits
accruing from the operator certification requirements." (79 FR
57788, footnote 2).
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In making their arguments about the impact of the certification
deadline extension on safety, several of these comments equated crane
operator training and crane operator certification. (ID-0571, 0577,
0620, 0629, 0644, 0649, 0652). OSHA had previously addressed the same
issue in its 2014 extension, pointing out that for the requirements for
crane operator training at 29 CFR 1926.1427(f), like the other
provisions from the crane standard except certification, are currently
in effect and would not be impacted by any extension (see 79 FR 57788).
Employers currently have, and will continue to have, a responsibility
to ensure crane operators they employ are trained according to that
standard.
Other comments in opposition of the extension stated that employers
have had enough time to make sure that their operators are certified,
meeting the certification requirements of the 2010 final rule. (ID-
0542, 0551, 0556, 0558, 0568, 0583, 0587, 0615-616, 0622-623, 0630-631,
0652, 0661). An anonymous commenter stated that "[s]afety conscious
construction employers know or should have known of this new operator
certification requirement and have been given a substantial amount of
time to comply," (ID-0551). Another commenter noted that employers of
crane operators "have had seven years to get the new certification."
(ID-0661).
Based on the record as a whole, OSHA finds the arguments in favor
of delaying the operator certification deadline to be more persuasive.
OSHA shares the commenters' concerns about a potential disruption to
the industry that might occur if the majority of certified operators
currently hold a form of certification that would not comply
with OSHA's standard. The impact on the industry would be particularly
unwarranted in light of OSHA's public disclosure to ACCSH during the
committee's meeting on March 31 and April 1, 2015, that the Agency
intends to propose removing the capacity component of certification,
which is the sole reason that most of these operator certifications
would not comply with OSHA's standard. OSHA also acknowledges the
commenters' point that while there has been time for more operators to
become certified, many employers may have delayed in requiring their
employees to be certified while they waited for OSHA to clarify the
criteria for the certification so that they could avoid spending funds
on a certification that would not meet OSHA's standard. To the extent
that the Agency's actions have contributed to this uncertainty, OSHA
agrees that it would not be fair to penalize employers by enforcing the
certification requirement before completing the separate rulemaking to
change that criteria. The additional one-year extension will provide
the Agency with the time it needs to address those concerns.
B. Extension of the Existing Employer Duty
The commenters who specifically addressed the extension of the
existing employer assessment duty were unanimous in supporting the
extension to ensure that employers retained responsibility for ensuring
that their operators are competent to operate cranes. All of the
comments opposed to the one-year extension focused entirely on
certification and did not mention the employer duty.
The North America's Building Trades Union commented that "without
the proposed extension there would not be an employer duty to ensure
operators can safely operate equipment, which not only puts the
operator at risk of fatality or injury, but also puts all construction
workers around the equipment at risk as well as the general public on
certain construction projects." (ID-0618). The IUOE argues that even
if certification is required, "[c]ertification alone . . . is simply
insufficient in the absence of subsequent employer qualification to
ensure that a crane operator is qualified to safely operate the crane
to which he or she is assigned." (ID-0651).
While OSHA is not prepared to make a determination whether
certification alone is insufficient as the IUOE claims, OSHA agrees
that in order to ensure safe and competent crane operations during the
one-year extension, the employer duty must also be extended. Without an
extension of the employer duty, the standard would have no requirement
to ensure that crane operators know how to operate the crane safely
during the operator certification extension. Therefore it is important
that the Agency extend the employer duty while it engages in subsequent
rulemaking.
C. Length of the Extensions
Having determined that it is appropriate to delay the certification
deadline and extend the employer duty to ensure operator competence,
the remaining issue is the length of the extension. In the NPRM, OSHA
proposed delaying the operator certification deadline and extending the
existing employer duty for one year, until November 10, 2018. OSHA
requested comment on the duration of the extension.
The majority of comments support OSHA's proposed extension of the
deadline for crane operator certification and the employer duty for one
year. (ID-0545, 0561, 0563, 0566, 0572-575, 0578, 0580-582, 0585, 0588-
600, 0602-605, 0607-614, 0617-618, 0621, 0624-627, 0632-640, 0642-643,
0645-647, 0651, 0653, 0656-660, 0662-6664, 0666-667). Some of these
comments recommend that OSHA move as quickly as possible to address
these rules. (ID-0605, 0618, 0632, 0651, 0656). NCCCO agrees with the
Agency's proposed extension and "urges OSHA to act with all speed to
ultimately issue its Final Rule well within the extension on this
vitally important safety issue. . . ." (ID-0632). Jonathan Branton of
Murray State University commented that "this issue does not need to be
pushed back any further than one year" and it is "OSHA's
responsibility to not allow this to be further extended." (ID-0605).
The IUOE asked the Agency to "[p]lease do everything in your power to
ensure that OSHA completes the process by November 2018." (ID-0651).
Additionally, OSHA received comments recommending an extension of
three years and an indefinite extension until OSHA addresses the
certification issues raised by stakeholders after publication of the
2010 final cranes and derricks standard.
The National Propane Gas Association (NPGA) recommended delaying
the deadline for the certification requirement and extending the
employer duty "at least three years", arguing that "if three years
was not an adequate amount of time" to address certification issues
raised by stakeholders, "it is not reasonable to presume one year is
sufficient." (ID-0648). The NPGA continues that "[w]e are concerned
that the short delay is indicative of the agency's intent to conduct an
expedited process . . . . an accelerated rulemaking would be
antithetical to the purpose and spirit of public engagement in the
regulatory process." (ID-0648). The National Association of Home
Builders recommends that OSHA delay the deadline for the certification
requirements and extend the employer duty another three years or
indefinitely, arguing that "OSHA needs to ensure the certification
procedures will actually improve safety" and not allowing enough time
to address certification issues "only hurts the workers and the
regulated community with continually changing deadlines and
requirements." (ID-0598). ABC also recommended that both the deadline
for the certification requirement be delayed and the employer duty be
extended indefinitely as recommended by ACCSH in 2014, arguing that a
one year delay "will not provide a sufficient amount of time for OSHA
to complete a further rulemaking. . . . Limiting the amount of time the
agency has to complete the rulemaking could lead to rushed and unclear
regulations." (ID-0650).
While OSHA appreciates the concern of some stakeholders that a one-
year extension is an insufficient amount of time to address the issues
raised by the industry after publication of the crane standard, OSHA is
not persuaded an extension longer than one year is necessary. OSHA had
not even decided whether to pursue rulemaking when it finalized the
three-year extension in 2014. The Agency needed time to determine what
regulatory approach would be appropriate for addressing the concerns
raised by stakeholders after publication of the crane standard. (79 FR
7613). OSHA took time to make site visits and spoke to over 40 industry
representatives about crane operator certification and operator
competency. Using this information, OSHA drafted regulatory text that
it presented to a special meeting of ACCSH on March 31, and April 1,
2015, where several stakeholders had the opportunity to provide
feedback to the Agency.\6\ OSHA has taken the information from that
meeting and worked to develop a proposed rule addressing stakeholders'
concerns. OSHA has nearly completed that proposed rule and intends to
publish it for public comment shortly.
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\6\ Transcript for March 31: https://www.osha.gov/doc/accsh/transcripts/accsh_20150331.pdf; transcript for April 1: https://www.osha.gov/doc/accsh/transcripts/accsh_20150401.pdf.
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OSHA is in a different point of the process than it was three years
ago and is confident that it will be able to
complete the rulemaking within the year extension without curtailing
the opportunity for stakeholders and the general public to participate
fully in the rulemaking process.
The Agency rejects the calls for an indefinite extension for the
same reasons that it rejected them in 2014. Failing to specify a
compliance deadline for operator certification is likely to result in
greater, not less, confusion. In addition, if OSHA does not designate a
fixed period after which the certification requirements would
automatically take effect, the Agency may face additional legal
challenges to reinstating them. Moreover, OSHA has already dedicated a
significant amount of time and resources to implementing the existing
standard, including conducting an extensive negotiated rulemaking
process before requiring that employers ensure their crane operators
are certified. The Agency therefore finds it prudent and efficient to
maintain the status quo for one more year while it considers additional
rulemaking.
The Agency must balance the rationale for an additional extension
against the concerns raised by the other commenters who point out that
any unnecessary delay in the operator certification requirement could
prevent the Agency from obtaining the full safety benefit of the cranes
standard. For example, if OSHA delayed the operator certification
requirement for another three years but completed its rulemaking within
nine months, then delaying the certification deadline would be clearly
excessive and needlessly delay safety benefits. OSHA believes that
given the progress it has made developing a rule addressing
stakeholders' concerns regarding operator certification, a one-year
extension of both the deadline for the certification requirement and
the employer duty is appropriate.
Therefore, OSHA has decided to delay the operator certification
deadline for one year, until November 10, 2018, and to extend the
employer duty to ensure that crane operators are competent to operate a
crane safely for the same one-year period, as it proposed. The Agency
received no comment on the text of its proposed revision to Sec.
1926.1427(k), and the final rule adopts the provision as proposed.
D. Comments Outside the Scope of This Rulemaking
OSHA received comments to this rulemaking that, in part or in
whole, asked the agency to consider alternatives and revisions to the
certification requirements from the 2010 final rule. (ID-0544, 0546,
0548, 0549, 0555, 0564, 0567, 0598, 0606, 0639, 0646, 0648, 0651, 0655,
0658, 0660, 0663, 0667). These comments, although related to operator
certification and the employer duty, are outside the scope of this
rulemaking and the narrowly tailored issue OSHA proposed: Whether the
deadline for the operator certification requirements should be delayed
and whether the employer duty to ensure safe and competent crane
operation should be extended by one year.
III. Agency Determinations
A. Final Economic Analysis and Regulatory Flexibility Analysis
When it issued the final cranes rule in 2010, OSHA prepared a final
economic analysis (2010 FEA) as required by the Occupational Safety and
Health Act of 1970 (OSH Act; 29 U.S.C. 651 et seq.) and Executive
Orders 12866 (58 FR 51735) (Sept. 30, 1993) and 13563 (76 FR 3821 (Jan.
21, 2011)). OSHA also published a Final Regulatory Flexibility Analysis
as required by the Regulatory Flexibility Act (5 U.S.C. 601-612). On
September 26, 2014, the Agency included a separate FEA (2014 FEA) when
it published a final rule delaying until November 10, 2017, the
deadline for all crane operators to become certified, and extending the
employer duty to ensure operator competency for the same period (79 FR
57785). The preliminary economic analysis for this crane rule extension
(2017 PEA) was based on these documents along with further analysis and
is the basis for this final economic analysis (FEA). There were no
comments submitted to the record in response to the 2017 PEA that
included data that could alter OSHA's analysis; therefore, this FEA is
substantially the same as the 2017 PEA.
Because OSHA estimates this rule will have a cost savings for
employers of $4.4 million using a discount rate of 3 percent for the
one year of the extension, this final rule is not economically
significant within the meaning of Executive Order 12866, or a major
rule under the Unfunded Mandates Reform Act or Section 804 of the Small
Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et
seq.).
This FEA focuses solely on costs, and not on any changes in safety
and benefits resulting from delaying the certification deadline and
extending the employer duties under Sec. 1926.1427(k)(2). As OSHA
noted in its proposal, the Agency previously provided its assessment of
the benefits of the cranes standard in the 2010 FEA. OSHA did not
receive any comment on this approach or any request for additional
analysis of benefits. As noted elsewhere in this preamble, the primary
rationale for this final rule is to maintain the status quo--including
preservation of the employer duty to ensure that crane operators are
competent--while providing OSHA additional time to conduct rulemaking
on the crane operator requirements in response to stakeholder concerns.
Extending the employer's requirement to ensure an operator's
competency during this period means taking the same approach of the
previous extension: Continuing measures in existence since OSHA
published the crane standard in 2010. As OSHA stated in the preamble to
the 2010 final rule, the interim measures in paragraph (k) "are not
significantly different from requirements that were effective under
subpart N of this part at former Sec. 1926.550, Sec. 1926.20(b)(4)
(`the employer shall permit only those employees qualified by training
or experience to operate equipment and machinery'), and Sec.
1926.21(b)(2) (`the employer shall instruct each employee in the
recognition and avoidance of unsafe conditions . . .')" (75 FR 48027).
Delaying the operator certification requirement defers a regulatory
requirement and produces cost savings for employers. There will,
however, be continuing employer costs for extending the requirement to
assess operators under existing Sec. 1926.1427(k)(2); if OSHA does not
extend these requirements, they will expire in November 2017 and
employers would not have these costs after 2017. With the extension,
these continuing employer costs will be offset by a reduction in
expenses that employers would otherwise have been required to incur to
ensure that their operators are certified before the existing November
2017 deadline.
Overview
In the following analysis, OSHA examines costs and savings to
determine the net economic effect of the rule. By comparing the
additional assessment costs to the certification cost savings across
two scenarios--scenario 1 in which there is no extension of the 2017
deadline, and scenario 2 in which there is an extension until 2018--
OSHA estimates that the extension will produce a net savings for
employers of $4.4 million per year using a discount rate of 3 percent
($5.2 million per year using an interest rate of 7 percent).\7\
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\7\ As explained in the following discussion, OSHA typically
calculates the present value of future costs and benefits using two
interest rate assumptions, 3 percent and 7 percent, as recommended
by OMB Circular A-4 of September 17, 2003. All dollar amounts unless
otherwise stated are in 2016 dollars.
---------------------------------------------------------------------------
OSHA's analysis follows the steps below to reach its estimate of an
annual net $4.4 million in savings:
(1) Estimate the annual assessment costs for employers;
(2) Estimate the annual certification costs for employers; and
(3) Estimate the year-by-year cost differential for delaying the
certification deadline to 2018.\8\
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\8\ Though this is a single year extension, the analysis needs
to extend over several future years. For convenience, OSHA refers to
the annual time period as a "Certification Year" (CY) in this
economic analysis, which OSHA defines as ending November 10 of the
calendar year; e.g., CY 2017 runs from November 10, 2016, to
November 9, 2017.
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The methodology used here is substantially the same as used in the
2014 extension FEA, and OSHA did not receive any comment on this
methodology when it included it in the 2017 PEA. Below, Table 1
summarizes these costs and the differentials across the two scenarios.
The major differences are updated wages and a revised forecast of the
composition of the operator pool across certification levels. The 2014
FEA analysis addressed a 3-year extension, so it gradually increased
the number of operators without any certification during that period.
The model in this PEA addresses an extension of just a single year, so
it holds the number of operators with each certification level
constant. The latter significantly simplifies the analysis versus that
presented in the 2014 FEA extension.
a. Annual Assessment Costs
OSHA estimated the annual assessment costs using the following
three steps: First, determine the unit costs of meeting this
requirement; second, determine the number of assessments that employers
will need to perform in any given year (this determination includes
estimating the affected operator pool as a preliminary step); and
finally, multiply the unit costs of meeting the requirement by the
number of operators who must meet it in any given year.
Unit assessment costs. OSHA's unit cost estimates for assessments
take into account the time needed for the assessment, along with the
wages of both the operator and the personnel who will perform the
assessment. OSHA based the time requirements on crane operator
certification exams currently offered by nationally accredited testing
organizations. OSHA determined the time needed for various
certification tests from the 2014 extension, drawing primarily from
informal conversations with industry sources who participated in the
public stakeholder meetings.
The Agency estimates separate assessment costs for three types of
affected operators, which together comprise all affected operators:
Those who have a certificate that is in compliance with the existing
cranes standard; those who have a certificate that is not in compliance
with the existing cranes standard; and those who have no
certificate.\9\ As it did in the previous extension, OSHA uses
certification status as a proxy of competence in estimating the amount
of assessment time needed for different operators. OSHA expects that an
operator already certified to operate equipment of a particular type
and capacity will require less assessment time than an operator
certified by type but not capacity, who in turn will require less time
than an operator who is not certified. In deriving these estimates,
OSHA determined that operators who have a certificate that is compliant
with the crane standard would have to complete a test that is the
equivalent of the practical part of the standard crane operator test.
The Agency estimates that it would take an operator one hour to
complete this test. Operators who have a certificate that is not in
compliance with the cranes standard would have to complete a test that
is equivalent to both a written general test and a practical test of
the standard crane operator test. OSHA estimated that the written
general test would take 1.5 hours to complete, for a total test time of
2.5 hours of testing for each operator (1.5 hours for the written
general test and 1.0 hour for the practical test). Finally, operators
with no certificate would have to complete a test that is equivalent to
the standard written test for a specific crane type (also lasting 1.5
hours), as well as the written general test and the practical test, for
a total test time of 4.0 hours (1.5 hours for the test on a specific
crane type, 1.5 hours for the written general test, and 1.0 hour for
the practical test).
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\9\ OSHA is not making any determination about whether a
specific certification complies with the requirements of the cranes
standard. For the purposes of this analysis only, OSHA will treat
certificates that do not include a multi-capacity component as not
complying with the cranes standard, and certificates that include
both a type and multi-capacity component as complying with the
cranes standard.
---------------------------------------------------------------------------
The wages used for the crane operator and assessor come from the
BLS Occupational Employment Survey for May 2016 (BLS 2017a), which is
an updated version of the same source used in the 2014 extension. From
this survey a crane operator's (Standard Occupational Classification
(SOC) 53-7021 Crane and Tower Operators) average hourly wage is $26.58.
The full cost to the employer includes all benefits as well as the
wage. From the BLS Employer Costs For Employee Compensation for
December 2016 (BLS 2017b) the average percentage of benefits in total
for the construction sector is 30.2 percent, giving a markup of the
wage to the total compensation of 1.43 (1/(1 - 0.302)). Hence the
"loaded" total hourly cost of an operator is $38.08 (1.43 x $26.58),
including a markup for benefits.\10\ Relying on the same sources, the
wage of the assessor is estimated to be the same as the average wage of
a construction supervisor (53-1031 First-Line Supervisors of
Transportation and Material-Moving Machine and Vehicle Operators) of
$28.75, while the total hourly cost is $41.19 (1.43 x $28.75). Below
these total hourly costs will be referred to as the respective
occupation's "wage." For assessments performed by an employer of a
prospective employee (i.e., a candidate), OSHA uses these same operator
and assessor wages and the above testing times to estimate the cost of
assessing prospective employees.
---------------------------------------------------------------------------
\10\ Calculations in the text may not exactly match due to
rounding for presentation purposes. All final costs are exact, with
no rounding.
---------------------------------------------------------------------------
Multiplying the wages of operators, assessors, and candidates by
the time taken for each type of assessment provides the cost for each
type of assessment. Hence, the cost of assessing an operator already
holding a certificate that complies with the standard (both type and
capacity) is one hour of both the operator's and assessor's time:
$79.27 ($38.08 + $41.19). For an operator with a certificate for crane
type only (not crane capacity), the assessment time is 2.5 hours for a
cost of $198.17 (2.5 x ($38.08 + $41.19)). Finally, for an operator
with no certificate, the assessment time is 4.0 hours for a cost of
$317.48 (4.0 x ($38.08 + $41.19)). OSHA did not receive any comments on
these unit cost estimates.
Besides these assessment costs, OSHA notes that Sec.
1926.1427(k)(2)(ii) requires employers to provide training to employees
if they are not already competent to operate their assigned equipment.
To determine whether an operator is competent, the employer must first
perform an assessment. Only if an operator fails the assessment must
the employer provide additional operator training required by Sec.
1926.1427(k)(2)(ii).
However, in determining this cost, OSHA made a distinction between
a nonemployee candidate for an operator position and an operator who is
currently an employee. For an employer assessing a nonemployee
candidate, OSHA assumed, based on common industry practice, that the
employer will not hire a nonemployee candidate who fails the
assessment. In the second situation, an employee qualified to operate a
crane fails an assessment for a crane that differs in type or capacity
from the crane the employee currently operates. In this situation, the
cost-minimizing action for the employer is not to assign the employee
to that new type and/or capacity crane, thereby avoiding training
costs. While the Agency acknowledges that there will be cases in which
the employer will provide this training, it believes these costs to be
minimal and, therefore, is not estimating costs for the training. OSHA
made the same determinations in the 2017 PEA and did not receive public
comment on them.
Number of assessments and number of affected operators. The number
of assessments is difficult to estimate due to the heterogeneity of the
crane industry. Many operators work continuously for the same employer,
already have had their assessment, and do not need reassessment, so the
number of new assessments required by the cranes standard for these
operators will be zero. Some companies will rent both a crane and an
operator employed by the crane rental company to perform crane work, in
which case the rental crane company is the operator's employer and
responsible for operator assessment. In such cases there is no
requirement for the contractor who is renting the crane service to
conduct an additional operator assessment. Assuming that employers
already comply with the assessment and training requirements of the
existing Sec. 1926.1427(k)(2), employers only need to assess a subset
of operators: New hires; employees who will operate equipment that
differs by type and/or capacity from the equipment on which they
received their current assessment; and operators who indicate that they
no longer possess the required knowledge or skill necessary to operate
the equipment.
To calculate the estimated annual number of assessments, OSHA first
estimated the current number of crane operators affected by the cranes
standard. The 2014 FEA estimated 117,130 operators and this FEA also
uses this estimate. The Agency solicited comment and additional data on
this estimate but received none.
For the purpose of determining the number of assessments required
each year under this proposal, OSHA is relying on the 23 percent
turnover rate for operators originally identified in the 2008 PEA for
the crane rule and used most recently in the 2014 extension FEA (79 FR
57793) and the 2017 PEA for this rule. OSHA requested comment on this
rate, but received none.
This turnover rate includes all types of operators who would
require assessment: Operators moving between employers; operators
moving between different types and/or capacities of equipment; and
operators newly entering the occupation. OSHA estimated that 26,940
assessments occur each year based on turnover (i.e., 117,130 operators
x 0.23 turnover rate). In addition, just as it did with the previous
extension, OSHA assumed that 15 percent of operators involved in
assessments related to turnover would fail the first test
administration and need reassessment (79 FR 57793). Therefore, OSHA
added 4,041 reassessments (26,940 assessments x 0.15) to the number of
reassessments resulting from turnover, for an annual total of 30,981
assessments resulting from turnover and test failure (26,940 + 4,041).
Annual assessment costs. OSHA must determine the annual base amount
for the two scenarios: (1) Retaining the original 2017 deadline (status
quo); and (2) delaying the deadline to 2018 (extension NPRM).
The first part of the calculation is the same under both scenarios.
Because the annual assessment costs vary by the different levels of
assessment required (depending on the operator's existing level of
certification), OSHA grouped the 117,130 operators subject to the crane
standard into three classifications: Operators with a certificate that
complies with the standard; operators with a certificate only for crane
type; and operators with no certification. In order to simplify the
estimation for this one-year extension (the 2014 extension was for 3
years) and reflect the last hard data point the Agency has, the Agency
is using a static crane operator pool and the composition of the base
operator population used in the 2014 deadline extension: 15,000 crane
operators currently have a certificate that complies with the existing
cranes standard, 71,700 have a certificate for crane type only (but not
capacity), leaving 30,430 crane operators with no crane certification
(117,130 total operators - (15,000 operators with compliant
certification + 71,700 operators with certification for type only)).
Assuming the turnover rate of 23 percent and the failure rate of 15
percent for turnover-related assessments are distributed proportionally
across the three types of operators, then the number of assessments for
operators with compliant certification is 3,968 ((0.23 + (0.23 x 0.15))
x 15,000), the number of assessments for operators with type-only
certification is 18,965 ((0.23 + (0.23 x 0.15)) x 71,700), and the
number of assessments for operators with no certification is 8,049
((0.23 + (0.23 x 0.15)) x 30,430).
Under scenario 2, there is an extension and employers would not
certify all of their operators during CY 2017. OSHA estimated the CY
2017 assessment costs for scenario 2 by multiplying the assessment
numbers for each type of operator by the unit costs, resulting in a
cost of $6,624,861 (($79.27 x 3,968) + ($198.17 x 18,965) + ($317.08 x
8,049)). Under scenario 1, the employer-assessment requirement will be
in effect for all of CY 2017, while employers would be gradually
certifying all of their operators during CY 2017. As a result, the CY
2017 assessment costs identified for scenario 2 would decrease to
$4,540,348 from $6,624,861 in scenario 1. This is because, as compared
to scenario 2, there will be more operators who will have a compliant
certificate; and therefore, under the approach described above the
employer assessment will require less time. This reduction in the
estimated time; and therefore, unit cost, lowers the overall assessment
cost (see discussion in the 2014 deadline extension FEA for more
details about this methodology).
Under both scenarios, once the certification requirement becomes
effective, the employer duty to assess the crane operator no longer is
in effect and so assessment costs are zero. Thus, in CY 2018, the
assessment costs under scenario 1 would be zero. Under scenario 2, the
assessment costs for CY 2018 would be the same as those under scenario
1 for CY 2017, because employers would be gradually certifying
operators over the course of that year.
b. Annual Certification Costs
OSHA estimated the annual certification costs using the three
steps: First, determine the unit costs of meeting this requirement;
second, determine the number of affected operators; and, finally,
multiply the unit costs of meeting the requirement by the number of
operators who must meet them. In this FEA, following the same
methodology as in the 2014 FEA, OSHA estimates that all certifications
occur in the year prior to the deadline, hence in CY 2017 in scenario
1, while in CY 2018
for the one-year extension in scenario 2. As in the annual assessment-
cost analysis described above, OSHA provides the calculations for CY
2017 under the existing 2017 deadline (scenario 1), and then presents
the certification costs for CY 2018 that result from OSHA's delay of
the certification requirement to November 2018 (scenario 2).
Unit certification costs. Unit certification costs vary across the
three different types of operators in the operator pool (operators with
compliant certification; operators with type-only certification; and
operators with no certification). Among operators without certification
there is a further distinction with different unit certification costs:
Experienced operators without certification and operators who have only
limited experience. As such, there are different unit certification
costs for four different types of operators. There also are ongoing
certification costs due to the following two conditions: The
requirement for re-certification every five years and the need for some
certified operators to obtain additional certification to operate a
crane that differs by type and/or capacity from the crane on which they
received their current certification.
OSHA estimated these different unit certification costs using
substantially the same unit-cost assumptions used in the FEA for the
2010 cranes standard (and exactly the same as the FEA of the 2014
deadline extension). In those previous FEAs, OSHA estimated that
training and certification costs for an operator with only limited
experience would consist of $1,500 for a 2-day course (including tests)
and 18 hours of the operator's time, for a total cost of $2,185.44
($1,500 + (18 hours x $38.08)) (see 75 FR 48096-48097). OSHA continues
to use a cost of $250 for the tests taken without any training (a
constant fixed fee irrespective of the number of tests (75 FR 48096)),
and the same number of hours used for each test that it used in the
assessment calculations provided above (which the Agency based on
certification test times). Accordingly, OSHA estimates the cost of a
certificate compliant with the crane standard for an operator who has a
type-only certificate to be $345.20 (i.e., 1 type/capacity-specific
written test at 1.5 hours and 1 practical test at 1.0 hours (2.5 hours
total), plus the fixed $250 fee for the tests (2.5 hours x $38.08) +
$250). For an experienced operator with no certificate, the cost is
$402.32 (i.e., the same as the cost for an operator with a type-only
certificate plus the cost of an added general written test of 1.5 hours
(4.0 hours x $38.08) + $250)).\11\
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\11\ There are no certification costs for operators who already
have a certificate that complies with the cranes standard.
---------------------------------------------------------------------------
For scenario 1, Sec. 1926.1427(b)(4) specifies that a certificate
is valid for five years. OSHA estimates the recertification unit cost
would be the same as the assessment for an operator with compliant
certification (i.e., $79.27). In the 2014 extension, OSHA assumed that
employers would pay a reduced fee for the recertification testing as
opposed to the cost of a full first-time examination. Because OSHA
lacked data on exactly how much the fee would be reduced, it used the
assessment cost as a proxy for the cost of recertification (79 FR
57794). OSHA did not receive any comment on that approach and is
retaining it for this FEA.
Finally, there will be certified operators who must obtain
certification when assigned to a crane that differs by type and/or
capacity from the crane on which they received their current
certification. This situation requires additional training, but less
training than required for a "new" operator with only limited
experience. Accordingly, OSHA estimated the cost for these operators as
one half of the cost of training and certifying a new operator, or
$1,092.72 ($2,185.44/2).
Number of certifications. After establishing the unit certification
costs, OSHA had to determine how many certifications are necessary to
ensure compliance with OSHA's standard. In doing so, the Agency uses
the 5 percent new-hire estimate from the FEA discussed above to
calculate the number of new operators; therefore, of the 117,130
operators affected by the standard, 5,857 (0.05 x 117,130) would be new
operators who would require two days for training and certification
each year. As discussed earlier, OSHA estimated that 71,700 operators
have type-only certification, 15,000 operators have certification that
complies with the existing cranes standard, and the remaining 24,574
operators (117,130 - (71,700 + 15,000 + 5,857)) are experienced
operators without certification.
Under scenario 1 (no extension), after all operators attain
certification by November 2017 there will still be ongoing
certification costs each year. With a constant total number of
operators, the same number of operators (5,857) will be leaving the
profession each year and will not require recertification when their
current 5-year certification ends. This leaves 111,274 operators
(117,130 - 5,857) who will need such periodic recertification. If we
approximate the timing of requirements for recertification as
distributed proportionally across years, then 20 percent of all
operators with a 5-year certificate (22,255 operators (.20 x 111,274))
would require recertification each year.
A final category of unit certification costs involves the
continuing need for certified operators to obtain further certification
when assigned to a crane that differs by type and/or capacity from the
crane on which they received their current certification. This
situation arises for both operators working for a single employer and
operators switching employers.
The operators who will not need multiple certifications in the
post-deadline period are operators with certification who move to a new
employer and operate a crane with the same type and capacity as the
crane on which they received certification while with their previous
employer. These operators will not need multiple certifications because
operator certificates are portable across employers, as specified by
the cranes standard (see Sec. 1926.1427(b)(3)). For an employer
looking to hire an operator for a specific crane, this option will
minimize cost, and OSHA assumes employers will choose this option when
possible.
After the certification deadline, OSHA estimates that each year 23
percent of the 117,130 operators (26,940 = 0.23 x 117,130) will enter
the workforce, change employers, or take on new positions that require
one or more additional certifications to operate different types and/or
capacities of cranes. Of these 26,940 operators, OSHA estimates 5 of
the total 23 percent, or 5,857 (0.05 x 117,130), will result from new
operators entering the occupation each year; 9 percent, or 10,542 (0.09
x 117,130), will result from operators switching employers but
operating a crane of the same type and capacity as the crane they
operated previously (i.e., no certification needed because
certification is portable in this case); and the remaining 9 percent,
or 10,542, changing jobs or positions and requiring one or more
additional certification to operate a crane that differs by type and/or
capacity from the crane they operated previously. These percentages are
identical to those in the 2014 FEA and the 2017 PEA.
Annual certification costs. To estimate the annual base cost for
the first scenario, OSHA calculates the certification costs for CY 2017
because that is the remaining period before the existing deadline. The
total cost for
certifying all operators in CY 2017 in accordance with the existing
cranes standard using the above unit-cost estimates and numbers of
operators is $47,436,368 ((71,700 operators with type-only
certification x $345.20) + (24,574 experienced operators without
certification x $402.32) + (5,857 operators with no experience or
certification x $2,185.44)). The Agency, following the previous FEAs
(75 FR 48096 and 79 FR 57795), annualized this cost for the five-year
period during which operator certification remains effective, resulting
in an annualized cost of $8,447,719. In section c below, OSHA uses this
amount in calculating the annual certification costs under scenario 1.
To determine the annual amount used in calculations for the second
scenario (the extension to 2018), OSHA examines the costs in CY 2017
because that is the first year with certification costs. All numbers
are the same, just shifted forward a year, so the total cost for having
all crane operators certified in CY 2018 is $47,436,368 (in 2018
dollars).
c. Year-by-Year Cost Differential for Delaying the Certification
Deadline to 2018 and Preserving the Employer Assessment Duty Over That
Same Period
The ultimate goal of this analysis is to determine the annualized
cost differential between scenario 1 (the status quo) and scenario 2
(the extensions of the certification date and the employer assessment
duty), so the final part of this PEA compares the yearly assessment and
certification costs employers will incur under the two scenarios.
Because the assessment and certification costs change across years
under each scenario, OSHA must compare the cost differential in each
year separately to determine the annual cost savings for each year
attributable to scenario 2. OSHA calculated the present value of each
year's differential, which provides a consistent basis for comparing
the cost differentials over the extended compliance period. OSHA then
annualized the present value of each differential to identify an annual
amount that accounts for the discounted costs over this period. Table 1
below summarizes these calculations.
Table 1 shows that assessment and certification costs are just
shifted out another year. As noted earlier, OSHA estimated the overall
cost differential between these two scenarios by calculating the
difference in total (assessment and certification) costs each year
across the two scenarios. The net employer cost savings in current
dollars attributable to adopting the second scenario are, for each
certification year: 2017, $18.2 million; 2018, $8.7 million; 2019-2021,
$0; 2022, -$7.5 million.\12\
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\12\ A positive cost differential indicates cost savings and a
negative cost differential indicates net costs. Savings in the first
two years is due to the lower cost of assessments versus
certification. Then net costs in year 2022 are due to the last year
of annualized certification costs for scenario 2, while this cost
ends in year 2021 for scenario 1.
Table 1--Year-by-Year Cost Differential if OSHA Delays the Certification Deadline to 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Certification year 2017 2018 2019 2020 2021 2022 2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operator Pool
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scenario 1 (No Deadline Extension)
Operators with Non-Compliant Certification........ 71,700 0 0 0 0 0 0
Operators with Compliant Certification............ 15,000 111,274 111,274 111,274 111,274 111,274 111,274
Operators with No Certification................... 24,574 0 0 0 0 0 0
New Operators..................................... 5,857 5,857 5,857 5,857 5,857 5,857 5,857
Scenario 2 (Deadline Extension)
Operators with Non-Compliant Certification........ 71,700 71,700 0 0 0 0 0
Operators with Compliant Certification............ 15,000 15,000 111,274 111,274 111,274 111,274 111,274
Operators with No Certification................... 24,574 24,574 0 0 0 0 0
New Operators..................................... 5,857 5,857 5,857 5,857 5,857 5,857 5,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
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Scenario 1 (No Deadline Extension)
Total Assessment Costs............................ 4,540,348 0 0 0 0 0 0
Total Certification Costs......................... 20,362,269 33,645,533 33,645,533 33,645,533 33,645,533 26,082,317 26,082,317
-------------------------------------------------------------------------------------------------
Total Costs................................... 24,902,617 33,645,533 33,645,533 33,645,533 33,645,533 26,082,317 26,082,317
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Scenario 2 (Deadline Extension)
Total Assessment Costs............................ 6,624,861 4,540,348 0 0 0 0 0
Total Certification Costs......................... 0 20,362,269 33,645,533 33,645,533 33,645,533 33,645,533 26,082,317
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Total Costs................................... 6,624,861 24,902,617 33,645,533 33,645,533 33,645,533 33,645,533 26,082,317
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Cost Differential (Scenario 2-Scenario 1). (18,277,756) (8,742,916) .......... .......... .......... 7,563,216 ..........
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Source: OSHA, ORA Calculations.
OSHA next determined the present value of these cost differentials
between the two scenarios. OSHA calculated the present value of future
costs using two interest rates assumptions, 3 percent and 7 percent,
which follow the OMB guidelines specified by Circular A-4. At an
interest rate of 3 percent, the present value of the cost differentials
for CY 2017 onwards results in an estimated savings of $20.2 million
($21.3 million using the 7 percent rate). Finally, annualizing the
present value over five years results in an annualized cost
differential (i.e., net employer cost savings) of $4.4 million per year
($5.2 million per year using the 7 percent rate).
As a sensitivity analysis the Agency looked at including possible
overhead costs. It is important to note that there is not one broadly
accepted overhead rate and that the use of overhead to estimate the
marginal costs of labor raises a number of issues that should be
addressed before applying overhead costs to analyze the costs of any
specific regulation. There are several approaches to look at the cost
elements that fit the definition of overhead and there are a
range of overhead estimates currently used within the Federal
government--for example, the Environmental Protection Agency has used
17 percent,\13\ and government contractors have been reported to use an
average of 77 percent.14 15 Some overhead costs, such as
advertising and marketing, vary with output rather than with labor
costs. Other overhead costs vary with the number of new employees. For
example, rent or payroll processing costs may change little with the
addition of 1 employee in a 500-employee firm, but those costs may
change substantially with the addition of 100 employees. If an employer
is able to rearrange current employees' duties to implement a rule,
then the marginal share of overhead costs such as rent, insurance, and
major office equipment (e.g., computers, printers, copiers) would be
very difficult to measure with accuracy (e.g., computer use costs
associated with 2 hours for rule familiarization by an existing
employee).
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\13\ U.S. Environmental Protection Agency, "Wage Rates for
Economic Analyses of the Toxics Release Inventory Program," June
10, 2002.
\14\ Grant Thornton LLP, 2015 Government Contractor Survey.
(https://www.grantthornton.com/~/media/content-page-files/public-
sector/pdfs/surveys/2015/Gov-Contractor-Survey.ashx).
\15\ For a further example of overhead cost estimates, please
see the Employee Benefits Security Administration's guidance at
https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-august-2016.pdf.
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If OSHA had included an overhead rate when estimating the marginal
cost of labor, without further analyzing an appropriate quantitative
adjustment, and adopted for these purposes an overhead rate of 17
percent on base wages, as was done in a sensitivity analysis in the FEA
in support of OSHA's 2016 final rule on Occupational Exposure to
Respirable Crystalline Silica, the overhead costs would increase cost
savings from $4.4 million to $4.5 million at a discount rate of 3
percent, an increase of 1.8 percent, and would increase cost savings
from $5.2 million to $5.3 million at a discount rate of 7 percent, an
increase of 1.9 percent.
d. Certification of No Significant Impact on a Substantial Number of
Small Entities
Most employers will have savings resulting from the one-year
extension, particularly employers that planned to pay for operator
certification in the year before the existing 2017 deadline. The only
entities likely to see a net cost will be entities that planned to hire
an operator with compliant certification after November 10, 2017.
Without the one-year extension, these entities will have no separate
assessment duty, but under the one-year extension they will have the
expense involved in assessing operator competency. As noted above,
however, OSHA estimated the maximum cost for such an assessment (for
operators with no certification) to be $317.08 per certified operator.
Small businesses will, by definition, have few operators, and OSHA
believes the $317.08 cost will be well below 1 percent of revenues, and
well below 5 percent of profits, in any industry sector using cranes.
OSHA does not consider such small amounts to represent a significant
impact on small businesses in any industry sector. Hence, OSHA
certifies this final rule will not have a significant impact on a
substantial number of small entities. After providing relatively
similar estimates in the 2014 FEA, OSHA made the same certification in
the 2014 FEA and proposed the same certification in the 2017 PEA but
did not receive any adverse comment on either the certification or its
underlying rationale.
B. Paperwork Reduction Act
The Paperwork Reduction Act (PRA) requires Federal agencies to
obtain the Office of Management and Budget (OMB) approval of
information collection requirements before an Agency can conduct or
sponsor the information collection requirement; and to display the OMB
control (approval number) (44 U.S.C. 3507(d)). Agencies submit an
Information Collection Request (ICR), with paperwork analysis, to OMB
seeking approval of their paperwork requirements. The information
collection requirements in the Cranes and Derricks in Construction
Standard (29 CFR part 1926, subpart CC) have been approved by OMB in
the ICR titled Cranes and Derricks in Construction Standard (29 CFR
part 1926, subpart CC), under OMB control Number 1218-0261. These
paperwork requirements expire on February 28, 2020.
In the August 30, 2017 NPRM, OSHA notified the public that the
Agency believed the proposed Cranes and Derricks in Construction:
Operator Certification Extension rule did not contain additional
collection of information, and that OSHA did not believe it was
necessary to submit a new (revised) ICR to OMB. OSHA instructed the
public to submit comments on this determination to OMB and encouraged
them to submit their comments to OSHA. No comments were received and
OSHA has determined this final rule requires no additional collection
of information or any permanent change to the collection program. As a
result, the Agency did not submit an ICR to OMB.
The Agency notes that a Federal agency generally cannot conduct or
sponsor a collection of information, and the public is generally not
required to respond to an information collection, unless it is approved
by OMB under the PRA and displays a currently valid OMB Control Number.
In addition, notwithstanding any other law, no person may generally be
subject to penalty for failing to comply with a collection of
information that does not display a valid Control Number.\16\
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\16\ See 5 CFR 1320.5(a) and 1320.6.
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C. Federalism
OSHA reviewed this final rule in accordance with the Executive
Order on Federalism (Executive Order 13132, 64 FR 43255, August 10,
1999), which requires that Federal agencies, to the extent possible,
refrain from limiting State policy options, consult with States prior
to taking any actions that would restrict State policy options, and
take such actions only when clear constitutional authority exists and
the problem is national in scope. Executive Order 13132 provides for
preemption of State law only with the expressed consent of Congress.
Federal agencies must limit any such preemption to the extent possible.
Under Section 18 of the Occupational Safety and Health Act of 1970
(OSH Act; 29 U.S.C. 651 et seq.), Congress expressly provides that
States and U.S. territories may adopt, with Federal approval, a plan
for the development and enforcement of occupational safety and health
standards. OSHA refers to such States and territories as "State Plan
States." Occupational safety and health standards developed by State
Plan States must be at least as effective in providing safe and
healthful employment and places of employment as the Federal standards.
29 U.S.C. 667. Subject to these requirements, State Plan States are
free to develop and enforce under State law their own requirements for
safety and health standards.
OSHA previously concluded from its analysis that promulgation of
subpart CC complies with Executive Order 13132 (75 FR 48128-29). In
States without an OSHA-approved State Plan, this final rule limits
State policy options in the same manner as every standard promulgated
by OSHA. For State Plan States, Section 18 of the OSH Act, as noted in
the previous paragraph, permits State-Plan States to develop and
enforce their own crane standards
provided these requirements are at least as effective in providing safe
and healthful employment and places of employment as the requirements
specified in this final rule.
D. State Plans
When Federal OSHA promulgates a new standard or more stringent
amendment to an existing standard, State Plans must either amend their
standards to be "at least as effective as" the new standard or
amendment, or show that an existing State standard covering this area
is already "at least as effective" as the new Federal standard or
amendment (29 CFR 1953.5(a)). State Plans adoption must be completed
within six months of the promulgation date of the final Federal rule.
When OSHA promulgates a new standard or amendment that does not impose
additional or more stringent requirements than an existing standard,
State Plans do not have to amend their standards, although OSHA may
encourage them to do so.
The amendment to OSHA's crane standard in this final rule only
delays the deadline for operator certification requirements and does
not impose any new requirements on employers. Accordingly, State Plans
are not required to amend their standards to delay the deadline for
their operator certification requirements, but they may do so if they
so choose. If they choose to delay the deadline for their certification
requirements, they also would need to include a corresponding extension
of the employer duty to assess and train operators that is equivalent
to Sec. 1926.1427(k)(2).
E. Unfunded Mandates Reform Act
When OSHA issued the final rule for cranes and derricks in
construction, it reviewed the rule according to the Unfunded Mandates
Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et seq.) and Executive Order
13132 (64 FR 43255 (Aug. 10, 1999)). OSHA concluded that the final rule
did not meet the definition of a "Federal intergovernmental mandate"
under the UMRA because OSHA standards do not apply to State or local
governments except in States that voluntarily adopt State Plans. OSHA
further noted that the rule imposed costs of over $100 million per year
on the private sector and; therefore, required review under the UMRA
for those costs, but that its final economic analysis met that
requirement.
As discussed above in Section III.A (Final Economic Analysis and
Regulatory Flexibility Analysis) of this preamble, this final rule does
not impose any costs on private-sector employers beyond those costs
already taken into account in the 2010 final rule for cranes and
derricks in construction. Because OSHA reviewed the total costs of the
2010 final rule under the UMRA, no further review of those costs is
necessary. Therefore, for the purposes of the UMRA, OSHA certifies that
this final rule does not mandate that State, local, or tribal
governments adopt new, unfunded regulatory obligations, or increase
expenditures by the private sector of more than $100 million in any
year.
F. Consultation and Coordination With Indian Tribal Governments
OSHA reviewed this final rule in accordance with Executive Order
13175 (65 FR 67249) and determined that it does not have "tribal
implications" as defined in that order. The rule does not have
substantial direct effects on one or more Indian tribes, on the
relationship between the Federal government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian tribes.
G. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
Consistent with E.O. 13771 (82 FR 9339, February 3, 2017), OSHA has
estimated the annualized cost savings over 10 years for this final rule
to range from $4.4 million to $5.2 million, depending on the discount
rate. This final rule is considered an E.O. 13771 deregulatory action.
Details on the estimated cost savings of this final rule can be found
in the rule's economic analysis.
H. Legal Considerations
The purpose of the Occupational Safety and Health Act of 1970 (29
U.S.C. 651 et seq.) is "to assure so far as possible every working man
and woman in the nation safe and healthful working conditions and to
preserve our human resources." 29 U.S.C. 651(b). To achieve this goal,
Congress authorized the Secretary of Labor to promulgate and enforce
occupational safety and health standards. 29 U.S.C. 654(b), 655(b). A
safety or health standard is a standard "which requires conditions, or
the adoption or use of one or more practices, means, methods,
operations, or processes, reasonably necessary or appropriate to
provide safe or healthful employment or places of employment." 29
U.S.C. 652(8). A standard is reasonably necessary or appropriate within
the meaning of Section 652(8) when a significant risk of material harm
exists in the workplace and the standard would substantially reduce or
eliminate that workplace risk. See Industrial Union Department, AFL-CIO
v. American Petroleum Institute, 448 U.S. 607 (1980). In the cranes
rulemaking, OSHA made such a determination with respect to the use of
cranes and derricks in construction (75 FR 47913, 47920-21). This final
rule does not impose any new requirements on employers. Therefore, this
final rule does not require an additional significant risk finding (see
Edison Electric Institute v. OSHA, 849 F.2d 611, 620 (D.C. Cir. 1988)).
In addition to materially reducing a significant risk, a safety
standard must be technologically feasible. See UAW v. OSHA, 37 F.3d
665, 668 (D.C. Cir. 1994). A standard is technologically feasible when
the protective measures it requires already exist, when available
technology can bring the protective measures into existence, or when
that technology is reasonably likely to develop (see American Textile
Mfrs. Institute v. OSHA, 452 U.S. 490, 513 (1981); American Iron and
Steel Institute v. OSHA, 939 F.2d 975, 980 (D.C. Cir. 1991)). In the
2010 Final Economic Analysis for the crane standard, OSHA found the
standard to be technologically feasible (75 FR 48079). Therefore, this
final rule is technologically feasible as well because it does not
require employers to implement any additional protective measures; it
simply extends the duration of existing requirements.
List of Subjects in 29 CFR Part 1926
Construction industry, Cranes, Derricks, Occupational safety and
health, Safety.
Signed at Washington, DC, on November 3, 2017.
Loren Sweatt,
Deputy Assistant Secretary of Labor for Occupational Safety and Health.
Amendments to Standards
For the reasons stated in the preamble of this final rule, OSHA
amends 29 CFR part 1926 as follows:
PART 1926--[AMENDED]
Subpart CC--Cranes and Derricks in Construction
0
1. The authority citation for subpart CC of 29 CFR part 1926 continues
to read as follows:
Authority: 40 U.S.C. 3701 et seq.; 29 U.S.C. 653, 655, 657; and
Secretary of Labor's Orders 5-2007 (72 FR 31159) or 1-2012 (77 FR
3912), as applicable; and 29 CFR part 1911.
0
2. Revise Sec. 1926.1427(k) to read as follows:
Sec. 1926.1427 Operator qualification and certification.
* * * * *
(k) Phase-in. (1) The provisions of this section became applicable
on November 8, 2010, except for paragraphs (a)(2) and (f) of this
section, which are applicable November 10, 2018.
(2) When paragraph (a)(1) of this section is not applicable, all of
the requirements in paragraphs (k)(2)(i) and (ii) of this section apply
until November 10, 2018.
(i) The employer must ensure that operators of equipment covered by
this standard are competent to operate the equipment safely.
(ii) When an employee assigned to operate machinery does not have
the required knowledge or ability to operate the equipment safely, the
employer must train that employee prior to operating the equipment. The
employer must ensure that each operator is evaluated to confirm that
he/she understands the information provided in the training.
[FR Doc. 2017-24349 Filed 11-8-17; 8:45 am]
BILLING CODE 4510-26-P
